Iacocca's 'Commercial Truth' Is $20 Million Worth Of Genius

July 7, 1987|By Howard Means of the Sentinel Staff

WASHINGTON — Ah, so now we know why Lee Iacocca made $20 million in 1986 as chief executive officer of Chrysler Corp. and is worth every penny paid him by stockholders. Just take a look at the new Chrysler ad campaign.

Yes, the campaign is full of blue smoke and mirrors. The most dramatic part consists of a 22-word statement that runs over Iacocca's signature: ''Testing cars is a good idea. Disconnecting odometers is a lousy idea. That's a mistake we won't make again at Chrysler. Period.'' But the steps the company proposes to set things right with its public are full of sound and fury signifying, well, a little something.

Chrysler offers to replace any vehicle damaged in its test program between July 1985 and December 1986 -- and subsequently repaired and sold as new -- with a new Chrysler car of comparable value. That's a bold stroke, and a mostly empty one.

At worst, Chrysler might have to make good on 40 such new cars, at an average wholesale price in the $12,000 range. That works out to about half a million dollars, but the company also can resell the cars it replaces. Repackaging damaged goods as new goods is a terrible practice. Buying atonement for a net cost of, say, $300,000 is bargain-basement salvation.

And, yes, Chrysler embarked on this campaign only because it was indicted by a federal grand jury for the practices the ad addresses.

Automakers don't extend their warranties two years, broaden their coverage and offer free inspections to 60,000 car owners out of the goodness of their hearts. They extend warranties when their backs are to the wall and when their initial reaction to the indictment -- ''outrageous'' was the general tenor -- doesn't fly with potential car buyers. They do it for the same reason the Coca-Cola Co. brought back ''Coke Classic.''

Still, there are those 22 words, and they are, straight out, pure commercial genius. To get some sense of their impact, try putting words very similar to them in other people's mouths.

''Freeing American hostages is a good idea. Selling arms to Iran to free them is a lousy idea. Diverting profits from the sales to the contras is an even worse idea. Those are mistakes we won't make again in this administration. Period.''

Would we be going through the Iran-contra hearings on Capitol Hill if Ronald Reagan had spoken those words half a year ago? Would national governance be at a near standstill?

The truth, even an insincere commercial truth, is liberating. The administration's approach -- full of half-truths and half-lies, hems and haws, knew everythings and knew-nothings -- is a cage that has reduced the president to staring out from behind bars, a parody of leadership.

Or how about this: ''Having sex is a good idea. Having sex with someone other than your wife is a lousy idea, especially when you're a presidential candidate. That's a mistake I won't make again in this lifestyle. Period.''

It's a rare person who wouldn't agree with the first part of that statement, just as it's a rare person who wouldn't agree with Iacocca that testing cars is a good idea. It's also a rare person who has never contemplated life in the extramarital fast lane. What Gary Hart did -- whether he had sex or only fostered the impression that he might have had it with someone other than Mrs. Hart -- is within the ken of human understanding. The terse admission of a mistake might have saved his campaign; instead, Hart delivered a broadside and got out.

I have no idea what part Iacocca played in writing the words that run over his name, but somewhere along the line he hired or nurtured the management that thought up the statement or hired the ad agency that divined it. Whatever the case, Iacocca is at the top. On the evidence of this campaign, $20 million a year is not a penny too much for him.